AB 1042: Skilled nursing facilities: unpaid penalties: related parties.
- Session Year: 2021-2022
- House: Assembly
- Latest Version Date: 2021-10-04
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would, beginning January 1, 2023, expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account that are used for the purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department, beginning January 1, 2023, to give written notice to related parties that it may take action to collect the licensees debt, as specified. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also authorize the department to take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party and would require the department to give written notice to the licensee and related parties before the department takes such action.
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would, beginning January 1, 2023, expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account that are used for the purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department, beginning January 1, 2023, to give written notice to related parties that it may take action to collect the licensees debt, as specified. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also authorize the department to take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party and would require the department to give written notice to the licensee and related parties before the department takes such action.
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would would, beginning January 1, 2023, expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account for purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department department, beginning January 1, 2023, to give written notice to related parties that it may take action to collect the licensees debt, as specified. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also authorize the department to take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party and would require the department to give written notice to the licensee and related parties that the department may take such action.
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account for purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department to give written notice to related parties that it may take action to collect the licensees debt, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also require authorize the department to give written notice to related parties that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party. party and would require the department to give written notice to related parties that the department may take such action.
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account for purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department to give written notice to related parties that it may take action to collect the licensees debt, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also require the department to give written notice to related parties that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party.
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account for purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department to give written notice to related parties that it may take action to collect the licensees debt, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also require the department to give written notice to related parties that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party.
The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term long-term health care facility includes, among other types of facilities, a skilled nursing facility.
Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines related party for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation.
This bill would expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the departments position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee providers financial interest in the related party. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed.
Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted.
This bill would state that funds from that account for purposes of the facilitys management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in a related party. The bill would require the department to give written notice to related parties that it may take action to collect the licensees debt, as specified.
Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions.
This bill would also require the department to give written notice to related parties that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party.
Existing law, the California Occupational Safety and Health Act of 1973 (OSHA), requires the Chief of the Division of Occupational Safety and Health within the Department of Industrial Relations and qualified and authorized division inspectors and investigators to have free access to any place of employment to make an investigation or inspection for the protection of safety and health, as prescribed. OSHA, in this regard, authorizes the chief or their authorized representative, as applicable, to obtain warrants, issue subpoenas, and issue orders, as prescribed. This bill would make nonsubstantive changes to these investigation and inspection provisions.Existing law, the California Occupational Safety and Health Act of 1973 (OSHA), requires the Chief of the Division of Occupational Safety and Health within the Department of Industrial Relations and qualified and authorized division inspectors and investigators to have free access to any place of employment to make an investigation or inspection for the protection of safety and health, as prescribed. OSHA, in this regard, authorizes the chief or their authorized representative, as applicable, to obtain warrants, issue subpoenas, and issue orders, as prescribed.
This bill would make nonsubstantive changes to these investigation and inspection provisions.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department may take appropriate legal action in state or federal court to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party, as defined in subdivision (b) of Section 1424.3. Before taking any action pursuant to this paragraph, the department shall give written notice to the licensee and the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a)It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b)For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c)The director may appoint a temporary manager when any of the following circumstances exist:
(1)The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2)As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d)Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e)(1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A)The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B)A receiver is appointed under this article.
(C)The department approves a new management company.
(D)A new operator is licensed.
(E)The state department closes the facility, through an orderly transfer of the residents.
(F)A hearing or court order ends the temporary manager appointment.
(G)The appointment is terminated by the department or the temporary manager.
(2)The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f)(1)The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2)Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3)The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g)The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h)If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i)(1)If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2)At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A)Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B)Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(j)The temporary manager appointed pursuant to this section shall meet the following qualifications:
(1)Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2)Not have been found guilty of misconduct by any licensing board.
(3)Have no financial ownership interest in the facility and have no member of their immediate family who has a financial ownership interest in the facility.
(4)Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5)Be acceptable to the facility.
(k)Payment of the temporary managers salary or fee shall comply with the following requirements:
(1)Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2)Shall be equivalent to the sum of the following:
(A)The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B)Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C)Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3)May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l)(1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. Beginning January 1, 2023, the department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the departments determination. The documentation of the departments determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of Government Code), in which case the department shall provide the reason for not disclosing the records.
(m)The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)Beginning January 1, 2023, if a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the departments determination. The documentation of the departments determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of Government Code), in which case the department shall provide the reason for not disclosing the records.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the basis for the citation, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a)If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1)The facilitys provider agreement is terminated, by the federal government or the department.
(2)A temporary manager is appointed, under federal law, to operate it.
(3)Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4)A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5)A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b)The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c)If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d)(1)A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2)At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. Beginning January 1, 2023, the department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the outcome of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e)The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department may take appropriate legal action in state or federal court to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party, as defined in subdivision (b) of Section 1424.3. Before taking any action pursuant to this paragraph, the department shall give written notice to the licensee and the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a)It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b)For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c)The director may appoint a temporary manager when any of the following circumstances exist:
(1)The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2)As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d)Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e)(1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A)The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B)A receiver is appointed under this article.
(C)The department approves a new management company.
(D)A new operator is licensed.
(E)The state department closes the facility, through an orderly transfer of the residents.
(F)A hearing or court order ends the temporary manager appointment.
(G)The appointment is terminated by the department or the temporary manager.
(2)The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f)(1)The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2)Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3)The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g)The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h)If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i)(1)If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2)At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A)Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B)Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(j)The temporary manager appointed pursuant to this section shall meet the following qualifications:
(1)Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2)Not have been found guilty of misconduct by any licensing board.
(3)Have no financial ownership interest in the facility and have no member of their immediate family who has a financial ownership interest in the facility.
(4)Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5)Be acceptable to the facility.
(k)Payment of the temporary managers salary or fee shall comply with the following requirements:
(1)Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2)Shall be equivalent to the sum of the following:
(A)The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B)Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C)Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3)May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l)(1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. Beginning January 1, 2023, the department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the departments determination. The documentation of the departments determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of Government Code), in which case the department shall provide the reason for not disclosing the records.
(m)The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)Beginning January 1, 2023, if a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the departments determination. The documentation of the departments determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of Government Code), in which case the department shall provide the reason for not disclosing the records.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the basis for the citation, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a)If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1)The facilitys provider agreement is terminated, by the federal government or the department.
(2)A temporary manager is appointed, under federal law, to operate it.
(3)Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4)A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5)A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b)The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c)If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d)(1)A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2)At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. Beginning January 1, 2023, the department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the outcome of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e)The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department may take appropriate legal action in state or federal court to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party, as defined in subdivision (b) of Section 1424.3. Before taking any action pursuant to this paragraph, the department shall give written notice described in subdivision (a) of Section 1424.3 to the licensee and the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a)It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b)For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c)The director may appoint a temporary manager when any of the following circumstances exist:
(1)The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2)As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d)Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e)(1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A)The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B)A receiver is appointed under this article.
(C)The department approves a new management company.
(D)A new operator is licensed.
(E)The state department closes the facility, through an orderly transfer of the residents.
(F)A hearing or court order ends the temporary manager appointment.
(G)The appointment is terminated by the department or the temporary manager.
(2)The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f)(1)The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2)Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3)The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g)The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h)If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i)(1)If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2)At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A)Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B)Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(j(j)The temporary manager appointed pursuant to this section shall meet the following qualifications:
(1)Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2)Not have been found guilty of misconduct by any licensing board.
(3)Have no financial ownership interest in the facility and have no member of their immediate family who has a financial ownership interest in the facility.
(4)Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5)Be acceptable to the facility.
(k)Payment of the temporary managers salary or fee shall comply with the following requirements:
(1)Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2)Shall be equivalent to the sum of the following:
(A)The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B)Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C)Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3)May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l)(1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. The Beginning January 1, 2023, the department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the departments determination. The documentation of the departments determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of Government Code), in which case the department shall provide the reason for not disclosing the records.
(m)The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)If Beginning January 1, 2023, if a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party. If the department determines, after two notifications, that the related parties are not financially viable or recovery is unlikely, the department shall document this determination. The documentation shall include the names of the related parties notified, detailed information on the methods used by the department to make the determination, and a clear justification for the departments determination. The documentation of the departments determination and supporting explanation shall be available to the public by request, unless the records are not subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of Government Code), in which case the department shall provide the reason for not disclosing the records.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the basis for the citation, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734. Related party may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and any entity in which an immediate family member of an owner of those organizations has an ownership interest of 5 percent or more. Immediate family member includes a spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, and grandchild.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a)If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1)The facilitys provider agreement is terminated, by the federal government or the department.
(2)A temporary manager is appointed, under federal law, to operate it.
(3)Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4)A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5)A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b)The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c)If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d)(1)A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2)At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. The Beginning January 1, 2023, the department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the timeline outcome of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e)The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department shall give written notice to related parties described in subdivision (a) of Section 1424.3, that the department may take appropriate legal action in state or federal court to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party. party, as defined in subdivision (b) of Section 1424.3. Before taking any action pursuant to this paragraph, the department shall give written notice described in subdivision (a) of Section 1424.3 to the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a)It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b)For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c)The director may appoint a temporary manager when any of the following circumstances exist:
(1)The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2)As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d)Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e)(1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A)The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B)A receiver is appointed under this article.
(C)The department approves a new management company.
(D)A new operator is licensed.
(E)The state department closes the facility, through an orderly transfer of the residents.
(F)A hearing or court order ends the temporary manager appointment.
(G)The appointment is terminated by the department or the temporary manager.
(2)The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f)(1)The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2)Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3)The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g)The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h)If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i)(1)If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2)At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A)Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B)Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(jThe temporary manager appointed pursuant to this section shall meet the following qualifications:
(1)Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2)Not have been found guilty of misconduct by any licensing board.
(3)Have no financial ownership interest in the facility and have no member of their immediate family who has a financial ownership interest in the facility.
(4)Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5)Be acceptable to the facility.
(k)Payment of the temporary managers salary or fee shall comply with the following requirements:
(1)Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2)Shall be equivalent to the sum of the following:
(A)The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B)Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C)Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3)May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l)(1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. The department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph.
(m)The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)If a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the basis for the citation, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734. Related party may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and any entity in which an immediate family member of an owner of those organizations has an ownership interest of 5 percent or more. Immediate family member includes a spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, and grandchild.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a)If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1)The facilitys provider agreement is terminated, by the federal government or the department.
(2)A temporary manager is appointed, under federal law, to operate it.
(3)Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4)A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5)A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b)The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c)If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d)(1)A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2)At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. The department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the timeline of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e)The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department shall give written notice to related parties described in subdivision (a) of Section 1424.3, that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a) It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b) For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c) The director may appoint a temporary manager when any of the following circumstances exist:
(1) The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2) As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d) Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e) (1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A) The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B) A receiver is appointed under this article.
(C) The department approves a new management company.
(D) A new operator is licensed.
(E) The state department closes the facility, through an orderly transfer of the residents.
(F) A hearing or court order ends the temporary manager appointment.
(G) The appointment is terminated by the department or the temporary manager.
(2) The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f) (1) The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2) Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3) The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g) The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h) If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i) (1) If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2) At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A) Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B) Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(j) The temporary manager appointed pursuant to this section shall meet the following qualifications:
(1) Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2) Not have been found guilty of misconduct by any licensing board.
(3) Have no financial ownership interest in the facility and have no member of their immediate family who has a financial ownership interest in the facility.
(4) Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5) Be acceptable to the facility.
(k) Payment of the temporary managers salary or fee shall comply with the following requirements:
(1) Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2) Shall be equivalent to the sum of the following:
(A) The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B) Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C) Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3) May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l) (1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. The department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph.
(m) The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)If a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the immediate and substantial hazard present at the facility, basis for the citation, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734. Related party may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and any entity in which an immediate family member of an owner of those organizations has an ownership interest of 5 percent or more. Immediate family member includes a spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, and grandchild.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a) If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1) The facilitys provider agreement is terminated, by the federal government or the department.
(2) A temporary manager is appointed, under federal law, to operate it.
(3) Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4) A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5) A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b) The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c) If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d) (1) A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2) At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. The department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the timeline of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e) The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department shall give written notice to related parties described in subdivision (a) of Section 1424.3, that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a) It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b) For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c) The director may appoint a temporary manager when any of the following circumstances exist:
(1) The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2) As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d) Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e) (1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A) The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B) A receiver is appointed under this article.
(C) The department approves a new management company.
(D) A new operator is licensed.
(E) The state department closes the facility, through an orderly transfer of the residents.
(F) A hearing or court order ends the temporary manager appointment.
(G) The appointment is terminated by the department or the temporary manager.
(2) The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f) (1) The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2) Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3) The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g) The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h) If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i) (1) If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2) At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A) Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B) Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(j) The temporary manager appointed pursuant to this section shall meet the following qualifications:
(1) Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2) Not have been found guilty of misconduct by any licensing board.
(3) Have no financial ownership interest in the facility and have no member of their immediate family who has a financial ownership interest in the facility.
(4) Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5) Be acceptable to the facility.
(k) Payment of the temporary managers salary or fee shall comply with the following requirements:
(1) Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2) Shall be equivalent to the sum of the following:
(A) The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B) Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C) Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3) May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l) (1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. The department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph.
(m) The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)If a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the immediate and substantial hazard present at the facility, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734. Related party may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and an immediate family member of an owner of those organizations; including any entity in which an immediate family member of an owner of those organizations has an ownership interest of 5 percent or more. Immediate family member includes a spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, grandchild, and any person, other than a tenant or employee, sharing the household, unless the parties can demonstrate that they are acting separately and in their own independent interests. and grandchild.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a) If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1) The facilitys provider agreement is terminated, by the federal government or the department.
(2) A temporary manager is appointed, under federal law, to operate it.
(3) Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4) A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5) A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b) The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c) If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d) (1) A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2) At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. The department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the timeline of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e) The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
(a)The quality assurance fee, as calculated pursuant to Section 1324.21, shall be paid by the provider to the department for deposit in the State Treasury on a monthly basis on or before the last day of the month following the month for which the fee is imposed, except as provided in subdivision (e) of Section 1324.21.
(b)On or before the last day of each calendar month or quarter, as determined by the department, each skilled nursing facility shall file a report with the department, in a prescribed form, showing the facilitys total resident days for the preceding quarter and payments made. If it is determined that a lesser amount was paid to the department, the facility shall pay the amount owed in the preceding quarter to the department with the report. Any amount determined to have been paid in excess to the department during the previous quarter shall be credited to the amount owed in the following quarter.
(c)On or before August 31 of each year, each skilled nursing facility subject to an assessment pursuant to Section 1324.21 shall report to the department, in a prescribed form, the facilitys total resident days and total payments made for the preceding state fiscal year. If it is determined that a lesser amount was paid to the department during the previous year, the facility shall pay the amount owed to the department with the report.
(d)(1)A newly licensed skilled nursing facility shall complete all requirements of subdivision (a) for any portion of the year in which it commences operations and of subdivision (b) for any portion of the calendar month or quarter in which it commences operations.
(2)For purposes of this subdivision, newly licensed skilled nursing facility means a location that has not been previously licensed as a skilled nursing facility.
(e)(1)If a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department shall assess interest at the rate of 7 percent per annum on any unpaid amount due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due, plus any interest, is paid in full.
(2)(A)When a skilled nursing facility fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, the department may deduct any unpaid assessment, including any interest and penalties owed, from any Medi-Cal payments to the facility until the full amount is recovered. Any deduction shall be made only after written notice to the facility and may be taken over a period of time taking into account the financial condition of the facility.
(B)Notwithstanding any other law, for the rate period from August 1, 2020, to December 31, 2020, and every subsequent calendar year thereafter, the department may deduct any unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility within the meaning of Section 413.17(b) of Title 42 of the Code of Federal Regulations. If the department deducts any unpaid assessments from the Medi-Cal payments to a related facility or entity, the department shall provide prior written notice to both the debtor facility and the related facility or entity, and, in taking into account the financial condition of the related facility, may apply that deduction over a period of time.
(3)In addition to the requirements specified in this subdivision and subdivision (h), any unpaid quality assurance fee, including any interest and penalties owed, assessed by this article shall constitute a debt due to the state and may be collected pursuant to Section 12419.5 of the Government Code.
(4)In addition to the requirements specified in this subdivision and subdivision (h), the department shall give written notice to related parties described in subdivision (a) of Section 1424.3, that the department may take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensees financial interest in the related party.
(f)(1)Notwithstanding any other law, the department shall continue to assess and collect the quality assurance fee, including any previously unpaid quality assurance fee, and any interest or penalties owed, from each skilled nursing facility, irrespective of any changes in ownership or ownership interest or control or the transfer of any portion of the assets of the facility to another owner.
(2)Notwithstanding any other law, in the event of a merger, acquisition, or change of ownership involving a skilled nursing facility that has outstanding quality assurance fee payment obligations pursuant to this article, including any interest and penalty amounts owed, the successor skilled nursing facility shall be responsible for paying to the department the full amount of outstanding quality assurance fee payments, including any interest and penalties, attributable to the skilled nursing facility for which it was assessed, upon the effective date of that transaction. An entity considering a merger, acquisition, or similar transaction involving a skilled nursing facility may submit a request to the department pursuant to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code to ascertain the outstanding quality assurance fee payment obligations of the skilled nursing facility pursuant to this article as of the date of the departments response to that request.
(g)During the time period in which a temporary manager is appointed to a facility pursuant to Section 1325.5 or during which a receiver is appointed by a court pursuant to Section 1327, the State Department of Public Health shall not be responsible for any unpaid quality assurance fee assessed before the time period of the temporary manager or receiver. This subdivision shall not affect the responsibility of the facility to make all payments of unpaid or current quality assurance fees, including any interest and penalty amounts, as required by this section and Section 1324.21.
(h)If all or any part of the quality assurance fee remains unpaid, the department may take any or all of the following actions against the debtor facility, in addition to assessing interest pursuant to paragraph (1) of subdivision (e):
(1)Assess a penalty of up to 50 percent of the total unpaid fee amounts, and any interest assessed pursuant to paragraph (1) of subdivision (e) in each applicable rate or calendar year.
(2)Recommend to the State Department of Public Health that license or Medi-Cal certification renewal or approval of a change of ownership application be delayed until the full amount of the quality assurance fee, penalties, and interest is recovered.
(3)(A)In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility as described in paragraph (2) of subdivision (f), the department may delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, or until the successor skilled nursing facility has entered into an alternative payment agreement with the department for the outstanding quality assurance fees, penalties, and interest owed that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(B)In addition to subparagraph (A), as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, the department may require either or both of the following:
(i)The successor skilled nursing facility to enter into an agreement with the department to be financially responsible to the department for the outstanding quality assurance fees, penalties, and interest owed by the previous facility owner.
(ii)The successor facility owner to enter into an agreement with the department to pay outstanding quality assurance fees, penalties, and interest owed by the successor facility owner on an alternative payment schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(i)In accordance with the Medicaid State Plan, the payment of the quality assurance fee shall be considered as an allowable cost for Medi-Cal reimbursement purposes.
(j)The assessment process pursuant to this section shall become operative not later than 60 days from receipt of federal approval of the quality assurance fee, unless extended by the department. The department may assess fees and collect payment in accordance with subdivision (e) of Section 1324.21 to provide retroactive payments for any rate increase authorized under this article.
(k)The amendments made to subdivision (d) and the addition of subdivision (f) by the act that added this subdivision are not substantive changes, but are merely clarifying existing law.
(l)(1)Notwithstanding any other law, for the 201112 rate year, the department may waive the actions provided under subdivision (h), or may allow a freestanding pediatric subacute care facility to delay payments for up to six months, to ensure the facility has the financial stability required to pay the fee.
(2)For the purposes of this article, freestanding pediatric subacute care facility has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.
(m)(1)Subject to paragraph (2), the department may waive a portion or all of either the interest or penalties, or both, assessed under this article with respect to a petitioning skilled nursing facility if the department determines, in its sole discretion, that the facility has demonstrated that imposing the full amount of fees under this article has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. A waiver pursuant to this subdivision may include, but need not be limited to, interest or penalties, or both, that accrue or are assessed with respect to a facility during the time period for which a change of ownership is pending, or for which a change of ownership is being contemplated, as determined by the department in its sole discretion.
(2)The departments waiver of some or all of the interest or penalties shall be conditioned on the skilled nursing facilitys agreement to pay outstanding fee amounts on an alternative schedule developed by the department that takes into account the financial situation of the facility and the potential impact on delivery of services to Medi-Cal beneficiaries.
(3)The department shall post on its internet website a list of all skilled nursing facilities that received a waiver for payment of interest or penalties, including the amount of interest or penalty that was waived.
SEC. 2.Section 1325.5 of the Health and Safety Code is amended to read:1325.5.(a) It is the intent of the Legislature in enacting this section to empower the state department to take quick, effective action to protect the health and safety of residents of long-term health care facilities and to minimize the effects of transfer trauma that accompany the abrupt transfer of elderly and disabled residents.
(b) For purposes of this section, temporary manager means the person, corporation, or other entity, appointed temporarily by the state department as a substitute facility manager or administrator with authority to hire, terminate, or reassign staff, obligate facility funds, alter facility procedures, and manage the facility to correct deficiencies identified in the facilitys operation.
(c) The director may appoint a temporary manager when any of the following circumstances exist:
(1) The residents of the long-term health care facility are in immediate danger of death or permanent injury by virtue of the failure of the facility to comply with federal or state requirements applicable to the operation of the facility.
(2) As a result of the change in the status of the license or operation of a long-term health care facility, the facility is required to comply with Section 1336.2, the facility fails to comply with Section 1336.2, and the state department has determined that the facility is unwilling or unable to meet the requirements of Section 1336.2.
(d) Upon appointment, the temporary manager shall take all necessary steps and make best efforts to eliminate immediate danger of death or permanent injury to residents or complete transfer of residents to alternative placements pursuant to Section 1336.2.
(e) (1) The appointment of a temporary manager shall become effective immediately and shall continue until any of the following events occurs:
(A) The temporary manager notifies the department, and the department verifies, that the facility meets state and, if applicable, federal standards for operation, and will be able to continue to maintain compliance with those standards after the termination of temporary management.
(B) A receiver is appointed under this article.
(C) The department approves a new management company.
(D) A new operator is licensed.
(E) The state department closes the facility, through an orderly transfer of the residents.
(F) A hearing or court order ends the temporary manager appointment.
(G) The appointment is terminated by the department or the temporary manager.
(2) The appointment of a temporary manager shall authorize the temporary manager to act pursuant to this section. The appointment shall be made pursuant to an agreement between the temporary manager and the state department that outlines the circumstances under which the temporary manager may expend funds. The temporary manager shall make no long-term capital investments to the facility without the permission of the state department. The state department shall provide the licensee and administrator with a statement of allegations at the time of appointment. Within 48 hours, the department shall provide the licensee and the administrator with a formal statement of cause and concerns. The statement of cause and concerns shall specify the factual and legal basis for the imposition of the temporary manager and shall be supported by the declaration of the director or the directors authorized designee. The statement of cause and concerns shall notify the licensee of the licensees right to petition the Office of Administrative Hearings for a hearing to contest the appointment of the temporary manager and shall provide the licensee with a form and appropriate information for the licensees use in requesting a hearing.
(f) (1) The licensee of a long-term health care facility may contest the appointment of the temporary manager by filing a petition for an order to terminate the appointment of the temporary manager with the Office of Administrative Hearings, within 60 days from the date of mailing of the statement of cause and concerns. On the same day as the petition is filed with the Office of Administrative Hearings, the licensee shall deliver a copy of the petition to the office of the director.
(2) Upon receipt of a petition of hearing, the Office of Administrative Hearings shall set a hearing date and time within five business days of the receipt of the petition. The office shall promptly notify the licensee and the state department of the date, time, and place of the hearing. The office shall assign the case to an administrative law judge. At the hearing, relevant evidence may be presented pursuant to Section 11513 of the Government Code. The administrative law judge shall issue a written decision on the petition within five business days of the conclusion of the hearing. The five-day time periods for holding the hearing and rendering a decision may be extended by the agreement of the parties.
(3) The administrative law judge shall uphold the appointment of the temporary manager if the state department proves, by a preponderance of the evidence, that the circumstances specified in subdivision (c) applied to the facility at the time of the appointment. The administrative law judge shall order the termination of the temporary manager if the burden of proof is not satisfied.
(g) The decision of the administrative law judge is subject to judicial review as provided in Section 1094.5 of the Code of Civil Procedure by the superior court sitting in the county where the facility is located. This review may be requested by the licensee of the facility or the state department by filing a petition seeking relief from the order. The petition may also request the issuance of temporary injunctive relief pending the decision on the petition. The superior court shall hold a hearing within five business days of the filing of the petition and shall issue a decision on the petition within five days of the hearing. The state department may be represented by legal counsel within the state department for purposes of court proceedings authorized under this section.
(h) If the licensee of the long-term health care facility does not protest the appointment, it shall continue in accordance with subdivision (e).
(i) (1) If the licensee of the long-term health care facility petitions the Office of Administrative Hearings pursuant to subdivision (f), the appointment of the temporary manager by the director pursuant to this section shall continue until it is terminated by the administrative law judge or by the superior court, or it shall continue for 30 days from the date the administrative law judge or the superior court upholds the appointment of the temporary manager, whichever is earlier.
(2) At any time during the appointment of the temporary manager, the director may request an extension of the appointment by filing a petition for hearing with the Office of Administrative Hearings and serving a copy of the petition on the licensee. The office shall proceed as specified in paragraph (2) of subdivision (f). The administrative law judge may extend the appointment of the temporary manager as follows:
(A) Upon a showing by the state department that the conditions specified in subdivision (c) continue to exist, an additional 60 days.
(B) Upon a finding that the state department is seeking a receiver, until the state department has secured the services of a receiver pursuant to this article.
(3) The licensee or the state department may request review of the administrative law judges decision on the extension as provided in subdivision (g).
(j) The temporary manager appointed pursuant to this section shall meet the following qualifications:
(1) Be qualified to oversee correction of deficiencies on the basis of experience and education.
(2) Not have been found guilty of misconduct by any licensing board.
(3) Have no financial ownership interest in the facility and have no member of his or her their immediate family who has a financial ownership interest in the facility.
(4) Not currently serve, or within the past two years have served, as a member of the staff of the facility.
(5) Be acceptable to the facility.
(k) Payment of the temporary managers salary or fee shall comply with the following requirements:
(1) Shall be paid directly by the facility while the temporary manager is assigned to that facility.
(2) Shall be equivalent to the sum of the following:
(A) The prevailing salary or fee paid by licensees for positions of the same type in the facilitys geographic area.
(B) Additional costs that reasonably would have been incurred by the licensee if the licensee had been in an employment relationship.
(C) Any other reasonable costs incurred by the appointed temporary manager in furnishing services pursuant to this section.
(3) May exceed the amount specified in paragraph (2) if the department is otherwise unable to attract a qualified temporary manager.
(l) (1)The state department may use funds from the Health Facilities Citation Penalties Account, pursuant to Section 1417.2, to operate the facility after all other facility revenues are exhausted.
(2)Funds used pursuant to this subdivision shall constitute a debt due to the state and may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensees financial interest in related parties described in subdivision (a) of Section 1424.3. The department shall give written notice to related parties that it may take action to collect the licensees debt as described in this paragraph.
(m) The state department shall adopt regulations for the administration of this section on or before December 31, 2001.
SEC. 3.Section 1424.3 is added to the Health and Safety Code, to read:1424.3.(a)(1)If a licensee provider fails to pay a penalty assessed pursuant to Section 1424.5 or 1425 in full when all appeals have been exhausted and the departments position has been upheld, the department shall give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5 percent or more that the department may take appropriate legal action to recover the unpaid penalty amount from the provider licensees financial interest in the related party.
(2)When a citation is issued under Section 1424, the department shall give initial written notice to related parties of the immediate and substantial hazard present at the facility, and the subsequent disciplinary action that is imminent if the violation is not remedied immediately, up to and including assessment of administrative penalties, for which the related party may be held responsible pursuant to this subdivision.
(b)Related party has the same meaning as in Section 128734. Related party may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and an immediate family member of an owner of those organizations; including spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, grandchild, and any person, other than a tenant or employee, sharing the household, unless the parties can demonstrate that they are acting separately and in their own independent interests.
SEC. 4.Section 1437.5 of the Health and Safety Code is amended to read:1437.5.(a) If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:
(1) The facilitys provider agreement is terminated, by the federal government or the department.
(2) A temporary manager is appointed, under federal law, to operate it.
(3) Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.
(4) A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.
(5) A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).
(b) The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.
(c) If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.
(d) (1) A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.
(2) At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. The department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the timeline of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.
(e) The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.
SECTION 1.Section 6314 of the Labor Code is amended to read:6314.(a)To make an investigation or inspection, the chief of the division and all qualified division inspectors and investigators authorized by the chief of the division shall, upon presenting appropriate credentials to the employer, have free access to any place of employment to investigate and inspect during regular working hours, and at other reasonable times when necessary for the protection of safety and health, and within reasonable limits and in a reasonable manner. The chief or their authorized representative may, during the course of any investigation or inspection, obtain any statistics, information, or any physical materials in the possession of the employer that are directly related to the purpose of the investigation or inspection, conduct any tests necessary to the investigation or inspection, and take photographs. Photographs taken by the division during the course of any investigation or inspection shall be considered to be confidential information pursuant to Section 6322, and shall not be deemed to be public records for purposes of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).(b)If permission to investigate or inspect the place of employment is refused, or the facts or circumstances reasonably justify the failure to seek permission, the chief or their authorized representative may obtain an inspection warrant pursuant to Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. Cause for the issuance of a warrant shall be deemed to exist if there has been an industrial accident, injury, or illness reported, if any complaint that violations of occupational safety and health standards exist at the place of employment has been received by the division, or if the place of employment to be inspected has been chosen on the basis of specific neutral criteria contained in a general administrative plan for the enforcement of this division.(c)The chief and their authorized representatives may issue subpoenas to compel the attendance of witnesses and the production of books, papers, records, and physical materials, administer oaths, examine witnesses under oath, take verification or proof of written materials, and take depositions and affidavits for the purpose of carrying out the duties of the division.(d)In the course of any investigation or inspection of an employer or place of employment by an authorized representative of the division, a representative of the employer and a representative authorized by his or her employees shall have an opportunity to accompany the inspector on the tour of inspection. Any employee or employer, or their authorized representatives, shall have the right to discuss safety and health violations or safety and health problems with the inspector privately during the course of an investigation or inspection. Where there is no authorized employee representative, the chief or their authorized representatives shall consult with a reasonable number of employees concerning matters of health and safety of the place of employment.(e)During any investigation of an industrial accident or occupational illness conducted by the division pursuant to Section 6313, the chief or their authorized representative may issue an order to preserve physical materials or the accident site as they were at the time the accident or illness occurred if, in the opinion of the division, it is necessary to do so in order to determine the cause or causes of the accident or illness, and the evidence is in potential danger of being removed, altered, or tampered with. Under these circumstances, the division shall issue that order in a manner that will avoid, to the extent possible, any interference with normal business operations.A conspicuous notice that an order has been issued shall be prepared by the division and shall be posted by the employer in the area or on the article to be preserved. The order shall be limited to the immediate area and the machines, devices, apparatus, or equipment directly associated with the accident or illness.Any person who knowingly violates an order issued by the division pursuant to this subdivision shall, upon conviction, be punished by a fine of not more than five thousand dollars ($5,000). REVISIONS: HeadingLine 2.(a)To make an investigation or inspection, the chief of the division and all qualified divisional division inspectors and investigators authorized by him or her the chief of the division shall, upon presenting appropriate credentials to the employer, have free access to any place of employment to investigate and inspect during regular working hours, and at other reasonable times when necessary for the protection of safety and health, and within reasonable limits and in a reasonable manner. The chief or his or her their authorized representative may, during the course of any investigation or inspection, obtain any statistics, information, or any physical materials in the possession of the employer that are directly related to the purpose of the investigation or inspection, conduct any tests necessary to the investigation or inspection, and take photographs. Photographs taken by the division during the course of any investigation or inspection shall be considered to be confidential information pursuant to the provisions of Section 6322, and shall not be deemed to be public records for purposes of the California Public Records Act. Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(b)If permission to investigate or inspect the place of employment is refused, or the facts or circumstances reasonably justify the failure to seek permission, the chief or his or her their authorized representative may obtain an inspection warrant pursuant to the provisions of Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. Cause for the issuance of a warrant shall be deemed to exist if there has been an industrial accident, injury, or illness reported, if any complaint that violations of occupational safety and health standards exist at the place of employment has been received by the division, or if the place of employment to be inspected has been chosen on the basis of specific neutral criteria contained in a general administrative plan for the enforcement of this division.
(c)The chief and his or her their authorized representatives may issue subpoenas to compel the attendance of witnesses and the production of books, papers, records, and physical materials, administer oaths, examine witnesses under oath, take verification or proof of written materials, and take depositions and affidavits for the purpose of carrying out the duties of the division.
(d)In the course of any investigation or inspection of an employer or place of employment by an authorized representative of the division, a representative of the employer and a representative authorized by his or her employees shall have an opportunity to accompany him or her the inspector on the tour of inspection. Any employee or employer, or their authorized representatives, shall have the right to discuss safety and health violations or safety and health problems with the inspector privately during the course of an investigation or inspection. Where there is no authorized employee representative, the chief or his or her their authorized representatives shall consult with a reasonable number of employees concerning matters of health and safety of the place of employment.
(e)During any investigation of an industrial accident or occupational illness conducted by the division pursuant to the provisions of Section 6313, the chief or his or her their authorized representative may issue an order to preserve physical materials or the accident site as they were at the time the accident or illness occurred if, in the opinion of the division, it is necessary to do so in order to determine the cause or causes of the accident or illness, and the evidence is in potential danger of being removed, altered, or tampered with. Under these circumstances, the division shall issue that order in a manner that will avoid, to the extent possible, any interference with normal business operations.
A conspicuous notice that an order has been issued shall be prepared by the division and shall be posted by the employer in the area or on the article to be preserved. The order shall be limited to the immediate area and the machines, devices, apparatus, or equipment directly associated with the accident or illness.
Any person who knowingly violates an order issued by the division pursuant to this subdivision shall, upon conviction, be punished by a fine of not more than five thousand dollars ($5,000).
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Date
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Status
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|---|---|
| Oct 4, 2021 | Chaptered by Secretary of State - Chapter 475, Statutes of 2021. |
| Oct 4, 2021 | Approved by the Governor. |
| Sep 20, 2021 | Enrolled and presented to the Governor at 3 p.m. |
| Sep 9, 2021 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 58. Noes 16. Page 3070.). |
| Sep 9, 2021 | Assembly Rule 63 suspended. (Page 3063.) |
| Sep 9, 2021 | In Assembly. Concurrence in Senate amendments pending. |
| Sep 9, 2021 | Read third time. Passed. Ordered to the Assembly. (Ayes 29. Noes 9. Page 2569.). |
| Sep 7, 2021 | Read second time. Ordered to third reading. |
| Sep 3, 2021 | Read third time and amended. Ordered to second reading. |
| Sep 2, 2021 | Read third time. Passed. Ordered to the Assembly. (Ayes 30. Noes 9. Page 2335.). |
| Aug 24, 2021 | Read second time. Ordered to third reading. |
| Aug 23, 2021 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Aug 16, 2021 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Aug 16, 2021 | In committee: Hearing postponed by committee. |
| Jul 6, 2021 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 5, 2021 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 9. Noes 1.) (June 30). |
| Jun 15, 2021 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on HEALTH. |
| Jun 7, 2021 | In committee: Hearing postponed by committee. |
| Jun 3, 2021 | Referred to Com. on HEALTH. |
| May 25, 2021 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 24, 2021 | Read third time. Passed. Ordered to the Senate. (Ayes 58. Noes 16. Page 1532.) |
| Apr 29, 2021 | Read second time. Ordered to third reading. |
| Apr 28, 2021 | From committee: Do pass. (Ayes 12. Noes 4.) (April 28). |
| Apr 14, 2021 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 12. Noes 2.) (April 13). Re-referred to Com. on APPR. |
| Apr 13, 2021 | Coauthors revised. |
| Mar 26, 2021 | Re-referred to Com. on HEALTH. |
| Mar 25, 2021 | From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended. |
| Mar 25, 2021 | Referred to Com. on HEALTH. |
| Feb 19, 2021 | From printer. May be heard in committee March 21. |
| Feb 18, 2021 | Read first time. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Sep 9, 2021 | AB 1042 JONES-SAWYER Concurrence in Senate Amendments | Assembly Floor |
Passed |
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| Sep 9, 2021 | Assembly 3rd Reading AB1042 Jones-Sawyer et al. By Rubio | Senate Floor |
Passed |
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| Sep 2, 2021 | Assembly 3rd Reading AB1042 Jones-Sawyer et al. By Rubio Reconsider | Senate Floor |
Passed |
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| Sep 2, 2021 | Assembly 3rd Reading AB1042 Jones-Sawyer et al. By Rubio | Senate Floor |
Passed |
|
| May 24, 2021 | AB 1042 Jones-Sawyer Assembly Third Reading | Assembly Floor |
Passed |
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Bill Author
Bill Co-Author(s):
